1- The integration into the global economy

The Qatari economy is based on liberal economic and financial policies.
By virtue of its natural resources of oil and gas, Qatar became an export oriented country.
(This export-oriented economy helped Qatar's easy access to the WTO).

2- Economic Development Strategy

Guided by the wise leadership of H.H. Sheikh Hamad Bin Khalifa Al-Thani, the Emir of the State.
Qatar adopts sound balanced economic policy aiming at:
* Achievement of sustainable economic development.
* Diversifying national income resources.
* Increasing private sector contribution in economic development.
* Encouraging inflows of direct foreign investments.
* Complying with WTO commitments & obligations.

Availability of financial resources of oil & gas exports leads to adoption of:

- Comprehensive economic and social development including:

* Efficient economic & social infrastructure.
* Establishing of heavy industries in petrochemicals & steel.

- Incentives to local private sector to establish medium & small industries.

- Incentives to foreign capital for joint ventures with their national counterparts, or for 100%

ownershipin certain sectors such as:

Agricultural, industry, health, education and the development and exploitation of natural resources or energy or mining.

Qatar is bestowed with large and diverse natural resources, the most important of which are:-

Crude Oil :

Qatar has modest oil reserves estimated at 0.6 billion barrels. Oil is produced from two major divisions:-

• Onshore oil of the Dukhan oil fields which produced crude oil, Condensate and associated natural gas.

• Offshore oil, mainly in Maydan Mahzam, Bul-Hanin, Iddel Sharji and Gulf oil fields, all located within the territorial waters of the Qatar peninsula. Onshore oil is of high quality with an API (American Petroleum Institute) gravity of 40.9° and less than 1.1 % of sulphur content. Offshore oil is of an average API gravity of 34° and a sulphur content of 1.54%.

Natural Gas :

Qatar has around 6% of the worlds proven natural gas reserves in a large single non-associated natural gas reservoir in the North Gas field. Total gas in place is estimated at about 500 trillion cu. Ft, and recoverable reserves at about 380 trillion cu. Ft. In addition, some 500 million cu. Ft/day of associated natural gas are produced from both onshore and offshore oil fields.

Mineral Resources :

Qatar has considerable mineral resources that can be exploited in the building and construction industry as well as other industries such as limestone, gypsum, clay, shale, sand and lesser amounts of dolomite, salistite and magnesium salts.

Agriculture :

The total cultivated area was 101,166 Donuums in 1998 which constitutes 16.6% of the total surface area of Qatar. The extreme salinity of soil, scarcity of water for irrigation and the harsh weather conditions in general have limited the activity in this sector. Strenuous efforts are being made by the State to optimise the use of the limited resources available through the application of advanced agricultural research methods and latest propagation and irrigation techniques.

Fishery Resources :

The extensive coastline of the Qatar peninsula of well over 700 km, provides Qatar with its rich fishery resources. Fishing was for long periods of time before the advent of oil, a successful means of livelihood of the Qatar people. At present, local fishing operations are able to meet most of the fish market demand requirements. During 1999 fish catch amounted to 5532 tonnes.

Natural wells.

Desalinated sea water from two major power and water desalination stations in Ras Aboud and Ras Abu Fontas.

Highlight of economic and financial developments in the Qatari economy over the past five years:-

Gross Domestic Paroduct (GDP) :

GDP is estimated to have increased to some QR.685 million in 2002 from QR.623 million in 2001. the economic performance is still substantially dependent on oil revenues whose contribution to the GDP is estimated to have risen from QR.12773 million in 1996 to QR.26435 million in 2000. The oil sector contribution to the GDP is forecasted to have reached 58.01% in 2000. With the price of crude oil serving as the principal determinant of growth in the GDP, this ratio is expected to change as per international oil prices. This situation is expected to persist unless further investments are directed to non-oil sectors of the economy, and in particular to the Manufacturing Industries sector.

State Budget :

The State budget achieved a surplus - for the third year subsequently - at a value of some QR6.5 billion, compared to a surplus of only QR50 million in 2001 and of QR5.1 billion in 2000.

Balance of Payments :

In 2002, the Qatari total balance of payment was in a surplus of QR8.1 billion compared to QR10 billion in 2001 and QR13.1 billion in 2000. The decrease in the Qatari total balance of payments surplus in 2002 compared to the two previous years is due to an increase in the value of the State imports of capital goods which were necessary for the expansion in some basic hydrocarbon industries and some infrastructure development projects in the State.

Inflation Rate :

Preliminary estimates for 2002 indicate that inflation rate in the State of Qatar should decrease to 1% compared to 1.4% in 2001 and 1.7% in 2000.

Financial and Money Market :

•

Money supply (MS) increased at the end of 2002 to some QR6.3 billion compared to some QR5.2 billion in 2001 and some QR4.5 billion in 2000, with an increase rate of 20.5%, 17.3% and 6.5% for the mentioned years respectively

Money supply (MS) increased to QR32.1 million in 2002 compared to QR28.8 for both 2001 and 2000, thus achieving an increase rate of 11.8%, 0%, 10.7% for the three mentioned years respectively.

•

Commercial banks total deposits increased in 2002 to some QR45.8 billion compared to some QR42.5 billion in 2001 and some QR36.3 billion in 2000. Net foreign assets increased in 2002 to some QR18 billion compared to a value of some QR14 billion in 2001 and a value of some QR13.3 billion in 2000. As well as total domestic credit increased to about QR36 billion in 2002 compared to QR34 billion in 2001 and about 28 billion in 2000.

•

As for "Doha Security Market" preliminary estimates indicate that the total number of shares dealt in the market was some 79,597 shares with a value of about QR3.2 billion compared to some 130,612 shares with a value of some QR4.7 billion in 2001, and some 31,611 shares with a value of some QR868 million in 2000.